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Pan American and Orko Silver JV to option Canasil Resoures' Carina project in Mexico

Pan American and Orko Silver JV to option Canasil Resoures' Carina project in Mexico

Canasil Resources (TSX-V: CLZ) announced today that it has signed an option agreement with Pan American Silver (NASDAQ:PAAS), giving Pan American the rights to up to 80% of its Carina project in Durango State, Mexico. Under the terms of the deal, Pan American is required to transfer its option rights for the Carina property to its La Preciosa joint venture with Orko Silver (TSX: OK).

The Carina property, which covers 12,147 hectares and is located 45 km northeast of the city of Durango, is adjacent to the southern border of Pan American and Orko Silver's La Preciosa silver project.

Initially, Canasil and Pan American agreed that the optionee can earn an initial 55% interest in the Carina property by incurring total exploration expenditures of US$3.65 million and total cash payments of US$0.365 million to Canasil over a period of four years.

Following the initial earn-in, a joint venture will be established, with the optionee as the operator of the project.

The optionee may also further increase its interest in the project to 70% by funding a full feasibility study within three years, and to 80% by financing the project through to production.

Canasil's mapping and sampling at the Carina site has defined an area of 500 metres by 800 metres hosting multiple quartz vein structures, with anomalous silver, gold and base metal values in surface samples.

Canasil's shares have declined 5.3% to trade at $0.27 as of 11:55 am ET.  The company's share price has tripled in the past year.

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